TikTok Is Forming an Investment Team to Purchase Music Content and Companies
- Martina
- 03 July 2024, Wednesday
It’s been a long time coming. TikTok is taking its evolution into a record label to the next stage. Just recently, news broke that the company is forming an in-house Music Content Investment Team to explore and seize “partnership or acquisition opportunities in the music content space on a global level.” The team will reportedly reside in Los Angeles, New York, and San Diego.
TikTok ventures into music M&A
The news was revealed through two TikTok job ads spotted by Music Business Worldwide. The ads indicate that the new investment team will strive to acquire copyrights and invest in music companies. To find the executives to lead the initiative, the company is looking into investment banking, management consulting, and private equity.
The first role TikTok is recruiting for is a Music Content Investment Manager. According to the ad, the successful candidate will be tasked with “developing and implementing investment strategies for acquiring and managing music content” as well as “evaluating music content acquisition strategy” and ”working and researching on strategic frameworks.” The position requires a Bachelor’s or Master’s degree in Finance, Economics, or relevant fields, and a minimum of 3 years of experience at a reputable investment bank, management consulting firm, or private equity firm.
The second job ad promotes the position of a senior Music Content Investment Lead in Los Angeles and San Diego. The selected candidate will be required to “formulate and implement investment strategies aligned with TikTok's objectives in music content operations,” “drive market research and analysis,” and “conduct diligence, including financial analysis, market assessment, and risk evaluation.” To succeed in the recruitment process, applicants must have a Bachelor’s or Master’s degree in Finance, Economics, or relevant fields and 5+ years of experience in the previously mentioned fields of expertise.
What will be the implications of TikTok’s new initiative?
Little is known about what’s really been driving TikTok’s move into the music M&A industry. One possibility is that TikTok aims to enhance its distribution service, SoundOn, which often distributes indie artists before they become viral and sign with one of the major labels.
In this scenario, TikTok could seek to take a stake in or full ownership of artists’ catalogs before any of the majors get a chance. This strategy could allow the platform to promote its owned content more aggressively and prioritize it over the content of other artists. While this would surely benefit the platform financially, it could potentially strain its relationships with labels — something we’ve already seen happen with Universal. This could also affect the platform’s reputation among viewers and other artists harmed by the strategy.
Alternatively, TikTok might be looking to invest in vintage catalog tracks that have proven multiple times to have the potential to become viral even decades after their release.
Or, perhaps, TikTok might follow in the footsteps of other tech giants like Apple or Spotify and invest in music tech start-ups to help them expand their capabilities and fulfill their potential.
The exact plans for TikTok’s new investment division are yet to be revealed, and the music industry will be watching closely to see how this initiative unfolds.
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